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Sprint SIP Service in Europe

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Stepping out from its domestic domain, Sprint Nextel Corp. (S - Analyst Report) is seeking opportunities in the European continent. The company has extended its Session Initiative Protocol (SIP) Trunking services to 12 countries in Europe including key markets like UK, Germany, France, Italy and the Netherlands.

The SIP service is aimed at providing affordable services of voice over IP (VoIP) coupled with its Global MPLS network. We believe the company’s strategy to build its presence beyond its home ground will serve as a long-term growth catalyst.

We also foresee Sprint pursuing growth goals and expanding into new markets with the influx of capital from the impending Softbank deal. Recently, the deal with SoftBank received Sprint shareholders’ approval and expected to close by Jul 2013.

Sprint’s core platform business also depends upon the success of its multi-billion dollar restructuring program known as Network Vision. Through this plan, the company is concentrating on the core Sprint platform, which includes CDMA, WiMAX and LTE technologies, and the eventual termination of the Nextel platform (iDEN business).

In this regard, the company recently completed the closure of the Nextel platform, which is expected to be replaced by LTE on 800 megahertz by the fourth quarter of this year.

This network restructuring will enable the company to remove higher expenses of running two separate networks. Further, Sprint also targets a strong recapturing rate of Nextel customers. This includes 1 million post-paid subscribers, the majority of whom are enterprise customers. In addition, the company has also struck deals with United States Cellular Corporation (USM - Analyst Report) and Clearwire Corporation in order to secure more spectrum that would support its LTE deployments.

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